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FINANCIAL STATEMENT.

The Hon. Sir H. A. Atkinson, Colonial Treasurer, in Committee of Supply last evening, delivered the following Financial Statement:—

Mr Hamlin,—The accounts of the last financial year having been already published, hon. members are in a position to know that the task before me this evening, though not of course without difficulties of its own, 13 a far more pleasant one than either of those which fell to my lot <.n the hat two occasions upon which it was my duty to present the Budget to this Committee. Our trade is reviving, our foreign niiriels have much improved, our industries, large and Hmal!, with hardly an exception, fchow increased activity and steady progress; the policy of retrenchment and strict economy, sanctioned by Parliament in ISS7, and since carried cut by the Government to the beat of their ability, has produced the result which. sooner or later was bound to follow; and I have to-night the pleasure, unusual for some years past, of announcing

A SURPLC3. That surplus is not indeed a veiy larfje one, but it is a suiplus, and those only who have really entered upon financial difficulties for the laßt few years ana felt the responsibility of helping to meet them cm appreciate to the fall extent the satisfaction of again fiading the balance on the right side of the account. The Committee, I am sure, will feel as I do this satisfaction, and will at the same time join with me in the Mution that we must be now doubly careful, lest with the return of increased prosperity there should be any return to unwise or unnecessary expenditure.

CosKOLiruTsn Fcnd Fxpeseitchf. for Year 1888-89. ORDINARY REVENUE.

The estimated expenditure for the year ISSS-S9, including the votes taken upon the Supplementary Estimates and charges under special Acts, amounts to L 4,0,4,054. The actual expenditure was 18,977,203. There was therefore unexpended of the amount authorised L10G,759, Hon. members will find particulars <f the unexpended appropriations in the tables attached to this Statement, and in the Appropriation Account. I may, however, here mention tint the non-payment of any balance of subsidy due to local bodies arises entirely from their neglecting to make application according to law, and that the total liability of L25.C77 outstanding on March 31 last is not unusual in amount, for in March, 188G, there was L51.73G, and in March, 1887, 1G9.390 outstanding, one moiety of which last two amounts was chargeable against the Consolidated Fund, and the other against the Public Works Fund. Hon. members will observe under class 8, "Education," that one vote, " Public Schools," has been exceeded by nearly L 60,000, and that an under issue of nearly L 7,000 has occurred on other votes, but chiefly on the vote for ecIioo! buildings. For the first time in our finance the vote for list year for school buildings was charged enthe'y against the Consolidated Fund.

Three thousand pounds was granted for that purpose ; but when the Government found that it was necessary to exceed the vote for carrying on the public schools by nearly LG.OOO, we, thinking it right not to exceed ths large total voted, L 379.093, determined, as the only means of accomplishing this object, to proportionately diminish the amount to be tpent upon buildings. This reduction in expenditure on buildings was made with mueh regret. Of two deeirable objects we had to forego one, and in the circumstances I hope the Committee will approve of the action of the Government. The item is only a small one, but wo were acting on the necessary rule that at whatever temporary sacrifice we must keep within our income if we wish to keep a sound finance. REVENUE FOB THE YEAR 1888-89 (ORDINARY REVENUE).

The total revenue estimated to be received during the year 1888-89 was L 4.162.400. The actual amount received was L 4,055,034, so that the revenuo as estimated in the Financial Statement exceeded the actual receipts by L 107.366. The Customs duties yielded less than the estimate by about L 55,392. This will probably not surprise member?. It is certainly under the circumstances not an unreasonable margin of error, takiDg into account the great difficulty in forming an accurate estimate when something like a complete revision of the tariff takes place during the yeir for which the estimate is made. The railways ako yielded less than the

estimate by L 38.865, but this was counterbalanced by a reduction in the expenditure of a still greater amount, so that the net revenue received was L360.01G instead cf L 338.162 as estimated. Stamps appear to have yielded les3 than estimated by L 14,329. This arose through an error, which should not have occurred, of twice including in the estimate certain postal receipts, the result of a mitunderstanding between the two departments which have to deal with the question of stamps estimates—viz., the Stamp and Postal Department?. Begistration and other fees fell short of the estimate by 18,273; but the estimate included LU,500 for rates to be received under the District Railways Purchasing Act, which, however, through the failure of the Bill introduced last year, did not come in. The only item of revenue in the receipts of the year which can be considered exceptional is a sum of LIB.OOO profit earned by the Public Trust Office. This by law is made revenue, but for some reason the amount has been allowed to accumulate in the office, and has not been paid into the public account year by year, as it should have been. Of this amount L 2.567 was earned last year; so the latter sum was strictly revenue of the year, and the windfall was only L 15.433. We shall always have such exceptional items on both sides of the account. For instance, in the same year we had to pay a sum nearly as large—viz., L 14.914, paid on account of abolition of offices in carrying out retrenchment.

LAND FOND EXPENDITURE AND KBYENTJE. The estimated expenditure of the Land Fund was L 127.423; the actual expenditure proved to be LU9.49G. The expenditure was therefore lees than the estimate by L 7.937. Of the expenditure, 123,336 was paid to local bodies as contributions in respect to receipts from deferred payment and perpetual lease land, and L 15.497 for rates en Crown lands. The estimated revenue of the Land Fund was L119,0C0; the actual receipts were L 108,007, being L 10,993 less than estimated. The amount received for land sold for cash was LII.OOB more than estimated, while the amount received for deferred payment land was L 22.001 under the estimate. The deficiency of revenue, however, arose not from the fact of less land being taken up thr.n was expected-for this was not the case—but partly because the perpetual lease tenure was preferred to the deferred payment, and chirfiy because payment of instalments due was not enforced, the Government having refrained from doing so, in fulfilment of their promise to Parliament, consequent upon the rejection by the Legislative Council of the Fair Kent Bill. There was outstanding on March 31 last a sum of L4G,SIG, due on deferred payment instalments ami perpetual lease and other rents

—L31.785 on the former ami L 14.741 ou tlio latter. I may say that the Government have had all these holdings revalued, and steps have now been taken to recover the amounts due upon the new valuati jn, leaving for the decision of Parliament the question as to how the balances are to be dealt with. This question is surrounded with difficulties, owing to the land having been taken up in many cases at more than it 3 value for cultivation, and to the very low rates ruling (until quite lately) for agricultural produce dating the past few years. The Committee will be glad to learn that more settlement has taken place upon the Crown lands of bona fide settlers during the past year than during any year since 1881. There have been 55,188 acres cf land taken up on the deferred - payment system by 335 selectors, 204,642 acres on the perpetual lease by 765 selectors, and 70,987 acres by 653 cash purchasers. This, I think hon. members will agree, is a highly Faiisfactory record, and shows—notwithstanding the temporary emigration of some cf our population, about which I will fay a few words presently—that our people have not loosened their hold upon this fine colony, but, on the contrary, have taken a firmer grip by 1,773 of them becoming proj.rietors of 33,817 acres more land than was held the year before. It is also evident that the land taken np is passing into the occupation of the people, and not falling into the hands of a few. The expenditure of the Land Fund having been L119.49R, as I have stated, and the revenue L 108.007, there was a deficiency of L 11.489 on the year's transactions.

nSAN.TAI. BEHULIH OF THE TGAU 1W« B'J. I havo said that the total ordinary-levenur. received was L 4,055,030, and that Hie total ordinary expenditure amounted to 1*1,.) i i, *> • There was, therefore, a mirnlus forth? yeaiof L77.7G9. This surplus, of wH™lm the primage duty, amounting to Üb, ..J. I Hawin nccovifwoe with the declare,! mtenhon of bo Government and tho implied sanction of the Homo Si oil L 50,000 of deficiency bills, Sgmr of the bills for 1.128,000 issued last S to meet the balance of the deficiency on the 31st March, 1888, which was not provided for by tho debentures issued m March, 188 a Tho Committee will, I am sure, think it a not unsatisfactory result of the effort to live within our means made last session and the session before, that the colony has not only raised within this year enough revenue to meet the who'o of the necessity ordinary expenditure, including in that a sum of at least L>2,001) for purposes which have hitherto boon invariably provided for from loan, but has also been ablo to pay olf L 50.000 of debt aid still have a small surplus in hand. And this satisfaction will not, i think, be diminished when lion, members come to critically exam'ne the tables attache 1 to this Statement, including the statement of liabilities, and also the appropriations. The statement of liabilities shows that the total amount on tho 31st March last, including those of tho Land Fund account, was Ll;>2.r>ll; while on the 31st March, 18S8, the amount was L144,93G-a difference of about L7.C00. Bui if we restrict tho comparison to the ordinary revenue account we find that the liabilities on the lUst March last exceeded those of the previous year by 140,154. The liabilities of ISS788 wore, however, exceptionally low. They wore far below the average of previous years; indeed, they were not less than 1.35,700 lower than tho liabilities of any year since the present system was brought into opeia'.ion in 1880-81. The comparison should therefore not to made with the previous year 1887-88, but with the average since 1880-81. That average was LIOG.OOO, being about L 21.000 more than the amount of the liabilities on the ."Ist of March last. Then again, if we take the total of tli3 thirteen classes on the annual appropriation, we find that the liabilities on March 31 last were nearly Ll,0001e?s than on J larch 31,1888, and less by about LiD.COO tban the average liabilities of the last eight years. I have said there is a small deficiency of Lll.-IS9 in the Laud Fund account, but this, as I havo already pointed out, is more than accounted for by the noncollcction of rents, and will certainly be made good during the current year. Such, then, are the results of the year, and I vcuturo to think they are results with which the colony may well be satisfied, especially when it is remembered that all this has been accomplished with a large decrease in the pub'ic works expenditure (exc'.udirg charges and expenses of raising loans), which have been for the la-t four yew* respectively. 1885-80, L 1.219,528; l«8l}-87, L1.1GG.374; 1887-88, L90G.711; ar.d last year, L 528,453. And of these amounts there was spout within this colony—in 1885 80, L 1.013.338; in 1880-87, L1.0C0.474 ; iulßß7- 1 8, L802,7U; and last year, L 150.353.

TIIK ri'UMC PKnT. The debt on the Hist March, 1888, was Lit; 753,437. On tho II Ist March, IKS'), it was L'>B'37">oso; but deducting the sinking funds a-crucd. now amounting to L1,3!)5,381), the net d'-bt was L:V;,!)7!>,Glil, as against L35,:>4;>,G10 last financial year. Thcro were old loans paid o'f and new loans raised, the result of the year s operation on tho loan account being an addition t> the permanent debt of L1,1!1G,G13: but on the other hand it is material to note that by far the greater part of this sum, though borrowed, was not spent, but retained in hand to the amount of L 1,357,096 on tho 31st March last. I shall first refer to the loans paid off. Debentures for 1.25,000 of the New Zealand loan of 18S5-8G duo Ist October, ISSN, and L 25.000 due Ist January, 1889, were redeemed by the trustees of the Sinking Fund of that loan. Debentures for L40,D()0 of the consolidated loan of ISBG-87, drawn for redemption in 1888, were redeemed out of the Pinking Fund provided for that purpose. Debentures fir L131.G00 issued under the Consolidated Stock Act, 1834, for increases of the Sinking Fund, wero redeemed with cash received by the Treasury from the Crown ag"ntn after the drawing of 1888 as the holdtrs of drawn bonch which had previously been converts 1 . Advances to tho amount of L 500,000, obtained on necurityof debenture* of the North Island Main Trunk Railway loan were repaid out of the proceeds of that loan. An additional sum of LB7 under the District Railways Purchasing Act, 1885, was paid cli out of the Consolidated Fund. The total amount of debr paid ofT was therefore L 728.587. Xt The loans raised waci-The North Island Main Trunk Railway loan, Ll.OOO.COO; the loan authorised in 188S, 1,1,000,000; debentures created for increases of Sinking Fund in 1388-89, L-203,200; for Government loans to local bodies, L 7" r \000; and for State forests, LI,OOO. These new loan* amount to L2 349,200, and if we deduct the amount paid off' (L 722,587) we get LI,GIG,GI3, as above rliowd » In my Financial Statement of the 29th May, 1888,1 drew attention to L250.C00 falling duo on the Ist November, 1883, under The Colonial Inscribed Stock .Act, 18S2, and L 49.500 on the loth December following under The General Purposes Loan Act, 1873, and I remarked that it would be necessary to obtain the authority of Parliament to renew these loans. Subsequently it was found that they could he dealt with under Tho Consolidated Stock Act, 1881. Accordingly short-dated debentures for 1299,500 were issued under that Act, pending tho creation of HtocV, and tho securities under the old Acts ■were surrendered and cancelled. Incidentally to my reference to the debentures for L131.G00 redeemed last year with cash received from the Crown agents after drawing the account of the Consolidated Loan debentures in 1888, I may inform the Committee that at the drawing of 1889 converted bonds to tie amount of 1/133,400 wore drawn, which sum lias been received and applied by the Treasury since the 31st March list to the redemption of debentures of the same amount issued under The Consolidated Stock Act, 1884, for increases of the sinking funds,

THE TUIILTC WORKS FUND. H*n. members are aware that for reasons mentioned in my last Financial Statement, and which it is unnecessary further to refer to, the Public Works Fund now consists of three aepirate and independent accounts.

No, 1 Account. Tho balance at credit of this account on 31st March, 1888, was L 200.391, including L 150,000 temporally ra ; sel under the Loan Act of 1887 ii anticipation of the L 500.000 authorised by t'aat Act. It will be recollected that an error in tho 10 hj section of the Act prevented m from floating the loan. That Act was therefore repealed last testi' n by a new Act timilar in all respects to tho one repealed, except that the section containing the error was omitted. The loan was floated last year, and tho account c-edited with 1.500,000. Credit was also given f>rL3,ooo under the District Railways Purchasing Act, 1885 80, and for L1D,420 recoveries in respect to expenditure of previous yea's. These credits, with the bala ce at the beginning of the year, amount to L 722 Sl7, subject to the repvyment of tho temporary advance of L 150.000 received in 1877-88, leaving L 572.817. The expenditure during the year amounted to L 210,258 for public works, and L28,75S for cha-ges and expenses of raising loans, including discount, miking together L2C9,01(;, and leaving an unexpended balance of L 303.801 at credit of tht3 account on 31st Much last. The principal items of cxpsndituce were: Roads, L1C4,031; public buildings, L 34,592; lighthouses, harbor works, and defences, L 52.593; and telegraph extension, L 12.047; tho amount expended on other services being L3G.394. Further information regarding this expenditure, as well as expenditure charges upon accou-.ts Nos. 2 and 3, will bi afforded when my hon. colleague, the Minister for Public Works, makes Ida Statement. In addition to the balance of L:'.03,50l at credit on the 31st March last, there is an available asset under The Government Loans to Local Lo lies Act, 1880, which authorise the conversion into a liability under that Act of debentures gi?on by local bodies to tho Treasury for advances out of tho Public Works Fund under The Roads and Bridges Construction Act, 1882. The Act of 188G gave power to the Treasurer to issue debentures for the amount of the liability created by conversion and to pay the proceeds into the Public Works Fund. That liability amounted at the 31st March last t:> L 87,074, which, with the balance of L 303,801 at credit, made L3!)1,775 availablo for expenditure, subject to liabilities amounting to L 165.273.

No. '■'■ Account. The North Island Main Trunk Railway loan of L 1.000.000, authorised in 1882, was raited last year in connection with the million loan authori ted last session. In anticipation of the raising of that loan, there had been expended Tip to the 31st March, 1888, L 478.000, leaving a balance of L 522.000 unexpended. Last yiar there was expended LBf>,lß4, including L 51.788 for charges and expenses of raising the loan, including discount, leaving an unexpended balance of L 335.818, subject to outstanding liabilities amounting to L 28.972.

No. 3 Account. At the 31st March, 18i8, the balanco at credit of this account was 1540,334, including Ll5O 000 temporarily raised under the Loan Act of 1887 in circumstances similar to those referred to in my remarks on No, 1 Recount. The loan of 1888, which authorised L 500,000 to be raised for this account. laving been floated last year, the amount available for expenditure, including tho balance at the beginning of the year, was therefore L 8915,224. The expenditure during thj year was: for railways, L 251,801; and departmental expenses, L 12.000 The fhargaß and expenses of raising the loan, in-

eludim-' die.eM.ml;, amounted to L21.3M; Ihu-i making the total charv/'i L'!7B,lo'), having an unexpended balance of 1.018,000, .suUj.-ct to lUbilitiwoutstanding amounting to Lid 1,39-1.

'iammai >i. The balance of the Public Work.) Fund au a whole on the 31st Match, 186*, including the loans authorised, but iintaised, amounted to Ll,!)-i8,035. During the year this amount wai augmented by L3.0U0 under the District Railways Purchasing Acts, ISHS-St;, ami L,v.yi2' ; recoveries on account of expenditure of previous making a total of L ( .)01,0(il. The expenditure on public works amounted to L 528,153, but, including charge and expenses of raising loans, including discount (LIOI.OIU), the total charge amounted to 1,033,305. The balance left at credit on tho 31st March, 1889, was, therefore, L1,357,C!K5, to which I add the asset of L89,b74, referred to in my remarks on No. 1 account, making together L1,445,fV70, suhj ct to L 308,639 of liabilities. The unexpended balance consisted of cash in the public account, L 515 083 ; 1 515,550 on fixed depo-iit; in London L 230.000 temporary investments; debentures of the loan of 1870, guaraneed by the Imperial Government. L 170,000; debentures under the Government Louis to Localßodies Act, L 25.000; Westport Harbor loan debentures, L 55.000 ; in the hands of officers of the Government, LSG.COIi; tota\ L 1,357,090; available under section 12 of the Government Loans to Local Bodies Act, 1880, L 87.97-1; total, L 1,474,070.

GOVitttNMENT LOANS TO LOCAL BODIES. In last year's Financial Statement I stated that up to the 31st March, 1888, L12;.0ll0 had been borrowed for the purpose of makirg loans to local bodies undor the provisions of the Government Loans to Local Louies Act, 188(1, and there had ken pa : d over to local bodies L103,8U, and that the engagements of the Treasury on account of loans not then fully taken up or not at a 1, or with regard to which all the necessary steps under the Act had not been taken by respective borrowers, amounted to L 29.221. I also stated that in response to a notice published in the ' Gazette' in January, 1888, under section 10 of the Act application;) to the amount of L 78.330 had come in, luailv all of which had been provisionally granted. _ I have now to inform the Committee that during the past voir a further sum tf L75,0;0 was borrowed by the Treasurer to meet these loans bringing up the total amounts borrowed to L2OO 000 on March 31, 1889 ; and that further sums to the amount of 183,174 were handed over to local bodies, making a total of L 192.310. During the year refunds to tho Treasury amounting to L9lO were made, under section 18 of tho Act, which provides for repayment of moneys borrowed in excess of the sum required to complete any public works. The balance at credit of the account at the clcse of the year was, therefore, L 51.024. The engagnntnts of the Treasury at the same date in respect to tho loans amounted to L 25,9.'0, irrespective of applications for L 2,775 from local authorities who bad not completed all the necessary formalities. Of the total sum of LI 93,310 paid over, L 174.351, including interest to date of inscription, has been inscribed up to the Ist February last under the H2nd section of the Act, the Treasury having in soino cases elected to inscribe the debts of local authorities in preference to requiring them to give debentures. The payments made between the 1-t Februa>y and the 3Lt March carry interest at 3 per cent, until the Ist tebruary, 1890, in accordance with the provisions of scctiou 2 of the Amendment Act of 1837, at which date the amounts, with interest added, will be inscribed in the registers. Umb r the authority of sections 27 to 31 of the Government Loans to Local Bodiis Act, 1880, which provides for conversion of debentures ir.-.ned by local bodies under the Roads and Bridg a Construct:on Act, 1882, into a debt under the fonner Ait, debentures to the amount of L 110,550 have been converted, ai.d on the 31st of Match last tho amount of debt in-xiibedin the register in respect to such debentures stood at L 87.914, which, together with the moneys lent under tho Act, L 174.381, made a total of L-262,255 on the register at the end of la*t financial year. In March last applications for further loans wero invited by notice in the ' Gazette,'r. suiting in applications for Lii 3 .'UL being provisionally granted in April. Loori bodies were, however, infotmed that a Bill would probably be introduced in tin coming session of Parliament with a view to increase the rate of interest payablo on loans maturing during tho current financial year, and that the loans povisionally granted would, if accepted, bo subject to such additional rate of interest as Parliament might .-.ee fit to impose, not exceeding Ope r cent. Estimated Extendi ntK \\w. the Yea?. 1889 90. ORI'iINAUY KKVKNI'E AfTOCNT.

I now come to tho consideration of the e.\ penditure and revenue of the mrrent ye.u, and, according to custom, I fust deal with the

EM'F.NTHTCUK. The estimated onlinacy totil c>:pnn''iturj is L-1.l 17,311. Of this, 1/1,013,205 i.<; f.ir inteie-t, Hon. members will bear in mind that of the LI ,883,405 which appears as interest and Sinking Fundunder thepe;irunent Aots, ab..-ut L-275,200, although eha.gcd against revenue, is recouped to the Consolidrted J uml hy the issue of debenture! under the Consolidated Stock Act cf 188-1. It in vciy nece-saty to remember this fact, »3 the larger Hum is often (•poken of as the amount of annual interest we have to pay, and so our financial position is assumed to be worse than it really is. Full details of expenditure will be found in the Kstimatcs, wliich will \v, in the hands of hon. members immedutely. There are no items requiring special regml, but I may call hon, membeia' attention to the_ increase in the- education vote, which is necessitate I by tbo usual annual increase in children of the school ago. The Estimate.) also include L 255,000 for school buildings. I must, hj nvcver, point out that, although we hwe increased the salaries of officers receiving less than 1 200 a year by a total of L-t 1,522, and of officers of higher grades to rectify inequalities, which I last session announced should be inquired into, by LI ,1)05, and have also increased the expenses of Native Land Court by 1.3,000, to enable the Court to cope with the large increase of work coming before it—l say that notwithstanding these increases the proposed expenditure under the thirteen classes annually voted is L 30.033 less than the amount granted last year. I hope that this fact will reconcile the Committee to the moderate increase which wo have thought fair to propose. Provision is also made for the continuation of subsidies to local bodies at tho same rate as was paid last year.

LAND FUND. The estimated expenditure chargeable against tho land is L 122.000. This is a small increase upon the expenditure of last year, which was Lll9 49fi. This increase, however, arises from the management of roads having been transfonvd to the Survey Department from "Public Works.

TOTAL ESTIMATED EXPENDITURE. The total e timated expenditure is therefore L 4,239,321, being L4,117,33l chargeable against ordinary revenue, and L122.0L0 against Land Fund. ] STISIATKI) Rkvknvi: FOR Ykar 1889-90. Assuming the present taxation to lernain unaltered, I estimate that we shall obtain for the year 1889-90 a return of L 1,157,800. This amount includes the estimate of L205,t00 which is paid as S nking Fund to tho trustees of the Binking funds of revenue investments of accrued sinking funds, and thou recouped to the Consolidated Fund by the State of an equivalent amount of debentures issued under the Act of 18 'A. I have estimated tho receipts from the Customs at L 1,551,000. I have reason to expect they will reach that amount. Trade has not yet become settled and steady, and there arc even yet, I am informed, stocks in hand to be cleared before th • increased duties came into force. It is therefore impossible to make a very accurate estimate, and I wish to guard myself by pointing out tho dillicultics under which my estimate is mado, With reference to the railway estimates, hon. members will see that an increase to the revenue is anticipated to the extent cf about L 281.500 ; but as expenditure is estimated about L 28.800 more than last year, the net revenue receivable is only increased from L3iio,ooo to L.''.70,000. It is natural and right that the Commissioners should not tako too sanguine a view of affairs ; but I certaiidy hope the result of the year's workings will prove to bo larger than they anticipate. It will be seen that there is a satisfactory increase of L3G,GB3 under the heading of depasturing licenses and rente. This arises from an increase in tho rate of pastoral rents, and from tho larger area taken up on the perpetual leasing system—a system which is becoming popular, and which, aa hon. members are aware, gives tho lessee tho right to purchase within thirty years. I will presently make a few remarks about the Property Tax, which it is estimated will yield under the new valuation LIG.COO less a year upon the present rate than under tho valuation of 1880. I shall also say a f w words upon tho subject of the tariff of 1888. Tho Land Fund is estimated to produce L130,lf;0 for the year 1889-90, particulars of which will be found in the tables attached to this Statement, 1 BTIMATED RESULTS OP TUB YEAR 1889-90

From what I have just said hon. membere will nee that I estimate to receive a total revenue of L4,323,!)00, against a total expenditure of L 4 239 351. But, excluding the Land Fund from both sides of the account, wc get a revenue of L 4,187,800 |igainstanexpendituroof 1,4,117,331, thus showing a balanco of L 70.469 at the end of the year 1889-90 if my anticipations are realised. But to this amount I add what is left of last yeax'asmplusof L77.G00 after \>ismgo«Lso,ooo of the detkit of the year before—viz , L27,7C9, and get a surplus of L 98,238, of which about L 55,000 will be applied to the further reduction of the floating debt, leaving a hum of L 33,238 at the end of the current year, which is certainly not too largo a margin to work upon, especially if tho proposal the Government will make for the continuance of the Gtago Central Railway

idiall be a'opted, But, I trust with careful ni iiia<<i in Mil. that it will provt* nnlfi"ir*iit.

I'HOI'F.UTV TAX. 1 will now fulfil my promise and say a few woids about, the Property fax. I havo said that under the new valuation it i< estimated that at the rate of Id in the € the tax will yield abf in' Lid,ooo a year less than under the o'd valuations. This arises from tho falling olf in the reputed value of real property more or I<mh tlivongliovit the colony. Thmo his been a fair incrc use in tho valuo of personal property, but as lion, members know, there has been a considerable fall in tho reputed valuo of real pioperty. Speaking generally, this fall, although in one sense to be regretted, is, I venture to think, on the whole nothing but advantageous to tho colony at Urge, for we all kiuw that the price of land ruling throughout most parts of the colony was for a time, and to a considerable extent is, spjculativo value rather than its value for use—its value to the speculator, often nothing more than a mere gambler in land, not to tho cass of men whose well being means the prosperity of the col ny, tho bona fide occupiers of the soil. We may well put iip ttitlt a temporary loss of revenue caused by a return to a more wholesome state of things. I promised last session to consider carefully this ijueslion of the Property Tax during the recess and to give the House an early opportunity this session to discuss the question. The result of the consideration of tho matter ly Government is that I shall propose certain modifications which will require legislation to g'.vo them ifl'ect. Thii will enable the House to debate fully the whole quebtion at an early date, as I propose to introduce the nec?;fuiy measure t) .give effect to the proposed alterations in the course of a few .lays, and to ak for its early comiderati m. 1 may here state, without going into unnecessary particulars, that wu propo e, amongst other things t° o.v.mpt from tho tax all machinery, which, however, will be strictly defined, and to a low any owner oi the Property Tax Commissioner to have prope.rtiis revalued under reasonable restrictions without awaiting the. trienn'al period. Those remissions, and the fall in the now valuations, will cause an estimated loss to the revenue of about 1.20,000 as compared with the amouut received fr< m the Property Tax la-it year. But the Government do not propose to ask for any new tax to meet this falling off, hoping that there will prove to bo rurricient elas'ieity in the general revenue to make it good. Ido not now propose to enter into any argument in favor of tins Property Tax or of tho remissions proposed, as they will come mire approptiately when tin Bill to which I havo refeircd is before the House for consideration.

THE TAIUI'T. I have had a series of tabh 3 prepared for the information of lion, members, showing the result) of the ten months of the voir in which the tariff Ins been in force in imports and duties as compared with the imports and duties for the corresponding ten months of the year ending 31st March, 1888. Tho compari on is necessarily voy imperfect, owing to aiticlta b. ing dillVrently grouped, and to different rates of duty being charged on items that were boforo in the same group I have examined the matter Ciiicfully, but so far as I can see it is unfortunately impossible at present to deduce any law or even fuund any satisfactory arguments as to the iti'ect upon trade and indusitiy produced by the tarilf. The timo has been far too short, and I lie disturbing elements too large—especially (lie extensive speculative clearances made in May, 188S, in anticipation of tho increased duties. One tiling, however, I may point out—that the tarilf has been successful in pioduc'ng the revenue it quired of it.

OT.UIO CK.YniA!, lIAILWAV. Last session I made a proni-ie to the House that I would, with the Minister for Public Works, visit the country on the route of the Gtago Central Railway, in order to judge for myself as to the desirability of continuing that woik, and make a proposal in accord nice with the conclusion I came to. In fulfiimen*' of that prombe the Minister for lubiic Works, the Mini.-ter for Defence, eeveial members of the House, the j'ngineer-in-Ohief, and myself, visited the Central Otago district shortly before last Christmas. I was much pleasad with the country, a d came to the conclu-ion, without any doubt, that the railway ought to be continued if it could be done without an infraction of the policy we are all agreed on—that is without leeourse to a new loan. We think it can be done, ami a'Kill to give eli'ect to our proposal of at once continuing the lino will be submitted for the consideration of Parliament.

.MIDLAND ItAIMVAV. I may here mention an iinpoi taut enterprise with wlrch the South Island especially, and the colony as a whole is deeply concerned—l mean the Midland liai.way. The compii.y have now realised three-quuteis of a million a' a further ii.slalmnit of their capital, which it in estimated will cnrtb'e them ti make th* stipulated cx|iondit'.i"o ftt the Springfield and Nelson ends i.f the line and to continue the Una to Rccfton and towards Lake l.runiier, on the West Coast. It is a matter for congratulation that this important woik, colonial in character, is now to Ik! pushed forward with vigor. It is to the i'it" re.:', of both pailies—of the colony not lew than of the company—that it should be brought to a sucks if ul isoie. To the colony its success means not only the completion of the Main Trunk Railway system from end to end of the. H'lUtln'rn Island, including the connection of important centros now isolated, bu* also tho permanent settlement of alaigetract of country which, but for this railway, could only be settled very slowly and with ditliculty.

VILLACF. SF.TTLKMK.VM. My colleague, the Minister ef Lands, has visited the village seltlcmer.ts north of Auckland, in the Forty-Mile Rush, and in the South, and I visited the one near Tim.i' u. A most instructive return has been prepared, and will be laid upoi. the tabic of the House, giving intore ting details of fcttlers and settlements. The general conclusion to hi drawn from past cxi eiiences i.i that village settlements supply a want, if formed of a small number of small settlers in a neighborhood where some wo-k can bo conveniently obtained, and where land i.'i of good quality, and, mo=t important of all, where the settlers are of the right sore. This general principle wo think is clear, but the application in particular cases which we had in view needs further consideration. I may state, however, that in newly-settled districts we have kept it in mind, and have made suitable reserves. IHSTIiKT NORTH OK AUCKLAND.

Tho country north of Auckland wa3 visited during the rec*a by three of my colleagues, who had not been previously in that part of the colony. I much l egret that time did not permit mo to visit it, as I hud hoped to do. The opinion they formed of tho district generally was very favorable. Tho Miui.-ter for Public Works in the Public Works Statement will :<tate what we propose with regard to the Main Trunk lino north of Auckland, lie will also make a proposal with regard to utilising the Puhipuhi kauri forest estate.

PHOSrKUTS 01' THE COLONY. I will now, Mr Hamlin, with tho pemrssion of the Committee, call tho attention of hon. members to some prominent and impjrtant facta relating to the condition and prospects of the colony, but before doing so I will eay a few words on an apparently adverse fact—the only one of any significance I have met with—which has naturally excited a good dcal_ of discussion. The colouy has lost by emigration during the last two years i 1.580 people. That is to say, 9,580 more people left than arrived in New Zealand. Of these, 4,470 wero males above fourteen years of age. This is a fact which, especially at first, much excited regret, and for which many remedies have been suggested. I have given the matter anxious consideration — for the Govcrn'.rent recognised it as a duty to find a remedy if ono was to be foundbut I camo to the conclusion that in the circumstances of this colony and neighboring colonies no remedy was possible that wo could consent to apply for tho only effective remedy, in my opinion, was the continuance of large public works expenditure. It is evident, I think, that during the many years that we have been continuously spending very large sums of money on public works—not tho General Government only but local bodies also —a numerous class has sprung up who have been relying on public expenditure as a means of livelihood, and many of whom do not care to live the life of an ordinary cottier. In support of this view, I would point to the fact that as our expenditure on public works decreased, so the tide of intercolonial migration turned against us. Taking merely expenditure within tho colony itself, our expenditure out of loan for work dono in tho colony during the year 1886-87 was in round numbers L1,0i0,000, and for the year 1888-89 L423,0C0, so that we have been spending during last year at the rate of L 717.000 per annum less than we were spending two years ago. This, I tako it, would in itselt far more- than account for the wages of the 4,470 ma!e3 who have left us. Hut in addition to this, there has been considerably decreased expenditure on public works by local bodic s. Of the total number who had been employed on public works some were no doubt absoibed by other industiirs, but tho less versatile or more restless drifted away. There is no doubt that recent exceptional discoveries of gold and silver in neighboring colonies, and the extraordinary prosperity which the colony of Victoria has enjoyed during the last two years—the same period during which we have been miking large reductions in our public works expenditure have also tended in a marked degree to induce many persons (who do not or perhaps cannot afford to look far ahead) to try their fortunes on the other aide. I have therefore come to tho conclusion that the loss of a small percentage of our population was inevitable when we began seriously to contract our large public works expenditure, and that, looking at tho circumstances of tho case, wo have passed through the ordeal remarkably well. To the reduction of the public works expenditure

is alsn largely tinroaiile a reduction which has iccently taken place in our railway trallie; find it in satisfactory to find that this in ho father than that it should ha due to a falling oft' of the legitimate internal trade of the country. Now let its take tho last half of tlie same period, the last of the same two yearn of which I have just been ppsaking, and ace what our permanent industrial population has been doing. So far as tbia is shown by our exports, lion, member* will find attached to this Statement a table showing in detail the exports for the last two years. From this it will be aeen that in every article of importance, with one ex ■ ception, there has been an increase during the last quarter, and in many of them a large increase. The table will well repay a study. It will bo aeen that the oxport of grain has increased from 3,030,843 bushels to 5,584.488 bushels; Brass seed from 154,550 bushels to 274,772 bushels; frozen meat from 49,3G3,8781b to (53,003,4721b and it noeds no prophot to say that this important industry will only reach its limit in quantity and price when some clfeotive organisation for its sale and distribution shall have been established in the United Kingdom; butter has increased from 2,272,0201b to 3 031,3701b, cheese from 3,381,61111b to 3,731,8401b, and sawn timber from 33,701,992 ft to 44,219,840 ft. The flax industry may bo said practically to have sprung into existence during tho last year, tho export having increased in that period from 1,812 tons to 5,003 tons, and it is still rapidly increasing every month. But, besides tho increased quantity of our exports there lias been also in tho main items a marked increase in value. The value of the exeeßs of exports, exelusive of wool, last year over those of the ye\r before may bo taken at no less than L992,0A0. The one exception to which I just referred is an important one, that hj wool, and it seoim probable there is a falling oil" in the quantity exported, but to what extent it is diflicult to f-ay, ub experience tells us September is the only qiurter in which an accurate citimatenn be made. It is also satisfactory ta know that the quantity of wool locally consumed in our mills hj s increased from 2 000,1.")'). in 1887-88 t047,953,C001bin 1888-89, and this increase must be set off against any decrease (f exports. The total exports for the year 18*7-88 were of the value of 1.0,415 745, while those for the year 1888-89 wer0L7,315,185. I will not trouble lion, members with the details of the products of our local industries for Homo coiisumpiion-they would of courso be nccssarily imperfect; but it will bo seen from the figures I have just briefly given about our woollen manufactures to what a magnitude some of these industries have already grown, while as to the quality of their products we have ample proof that they are steadily and dcservuVy gaining public favor, and that a large number of the articles produced would do credit to any country in the world, The mining industry is, I am happy to say, in a more hopeful condition than it has been for some vears. Tr.o yield of gold for the year ended 31st March last was 208.9020z, asagainst 191,9G10z for the previous year, be'ng an increase of l(i 9580z Special machinery and appliances are boing constructed, some of which are in operation, for working the auriferous beaches of the Middle Island, and from trials already made are bolieved to be likely to prove successful. By improved systems of hydraulic sluicing, also, low lying ground formerly unproductive and drifts considered valueless are now worked at a profit; and it is hoped that tho improvements which are being made in machinery and appliances for the reduction and tieatment of ores will solve tho question of treating successfully the refractory ores of the North Is and, and be the moaiiß of lodes being woiktd which hitherto have been considered non-pi}able. Our coalmines are being gradually developed. The output last year was 013,895 tons, as against 558,620 tons for the previous year, Inuther extensive works in connection with this iudustiy are contemplated, some of which are in progress, and when completed a large increase in tho output of coal may bo expected. Recent discoveries in Stewart Ishnd show that tin oro is distributed ever a largo extent of countty, both alluvial and in lodes, and it is inferred that rich deposits will bo discovered there. Very little work has, however, as yet been done.

That portion of the thrift of the colony which i i represented by the assets of friendly societies is steadily increasing year by year. According to the last compiled tables there were at the end of 1887 21,929 members of registered friendly societies, and the value of the accumulated funds was 1,383,515, Without allowing fo mi increase of members in 1888, it is fair to assume that the natural increase of the funds would boat the average rate of LI per member. The value, therefore, of the funds may be stated approximately at L 410,000 (inclusive of LIS,GW) in the Tost Office Savings Bank) at tlio end < f 18eS, and the increase for that year L 25,000. In addition to tbe-e fund?, the assets r f other societies registered under the Friendly Societies Act, and of societies registered under the Trade Union< Act, are approximately LIO,0()0 and LI!,000 respectively. In the Savings Banks of the colony on the 31st December, 188(1, the simeunt held oti deposit was 173.133,780; in 1887 it was 172,407,77"); and in 188S 12 01)1.692. In 18R0 the depositors numbered 91.290; in 1887 the number was 17)7,490; and in 1888 it was 103,010. The average amount at the credit of each depositor was in 1880 L 23 3s; in 1887, L2( <m; and in 18-8 L2ii Is. Between 1880 and 1888 the amount of deposits increased by nearly L 558.000, and the number of depositors by 11,750 Of n total number of 8,488 depositors in the PostOfibe Saving* IBank, 02,831 persons, or nearly three-fourths of the whole, had sums not exceeding 120 at credit I append to this Statement a very interesting tablo I have prepared, showing the remarkably bteady increase since 1880, both in the number of depositors and the amount deposited; and I would particularly draw the attention cf the Committee to this instructive f.iot, that the number of persons having de ;osits in the Pest Olt'icu Having* Bank not exceeding I 20 incrc.ifcd from 07,308 in 1880 to 00,013 in 1887, and to 02,831 in IS~9, and this is irrespective of similar small deposits with Savings Banks established under the Savings Bank Act, 1858, with regard to which I have not the data before me.

Thopngresa of the Government Insurance Pcpartmenfcand position of it:spolieiesand bu3ino>a may bo viewed a - i affording further indications of tiio canilition of that class of colonists (and it is a large one) who excrciso piudont care and forethought for themselves and families. During tho past year the new assurances amounted to neaily L3CO,OOC, showing an inereaso on the average of veent years, and approaching in amount the whole of the now business cff. cted by foreign life offices having branches in New Zealand. The average amount of individual assurances was larger than io previous year, being oloio on '• 270, which is an increase of fu% LSO per policy as compared with the average of the three years immediately preceding. The average amount of policies discontinued i-> Jsmal.'cr than that r-f any yeir since the initiation of the oflico; wl\ile the policies surrendered have been smaller in their total amount than in the preceding year. Tho accumulated fund has been augmented by L 123.000 during the year. This fund at the present moment excee do a million and a-half sterling, having doubled in amount during the last six years. It is inßhuctivo to compare the total ordinary life assurance of Now Zealand with that of tho other countries. The population of New Zealand possess L 24 of life assurance per head, whilst in Australia this averago is Lit) per head ; in United -States, L 8; Canada, Ll); and in tho United King.lom, Ll2 per head. Tho number of policies possessed by every thousand of population is :—New Zealand, 80 ; in Australia, <!;">; the T T nited States, I't; Canada, 24 ; an 1 United Kingdom, 2(1. The average amount of policy in the United Kingdom is 1.-IS7; in C.inuda. L 376; Australia, L 300; in the United States, Lii-vi ; and New Zealand, L29 r ). It is gratifying to note that, while the average sum assured by each polioy iH leas in New Zoalar.d than olsewhere, the total number of policy-holders in this colony bears a larger proportion to its total population than is tho case in any other English community ; and though individual policies average a less sum than elsewhere, tho number i 3 so much greater that tho total sum assured divided amongst the whole population gives a larger sum per head here than anywhere else. This, coupled with the ficts I have given concerning savings Innks and friendly societies, means two important things : that in the means of saving and in the will to save, the people of Now Zealand are, at least, not behind their kin in other p»rts of tho world. The last fact I will mention is an important one—

TICK GBFATLY IMPr.OVED CREDIT 01'' THE COLONY IN LONDON. I will give only a single instance. Eiglitcen months ago our 4 per cent, stock was i oiling rather heavily at 9GJ. It is n>w worth frcm LlO5 to LIOO, with an active market. I venture to think wo shall seo a further rise when our truo present position comes to be really and a fair and unprejudiced comparison ia made between New Zealand and other Australian colonies.

OCCLUSION. In concluding, Mr Hamlin, I would say that in giving prominence to these encouraging fact?, I desire again to impress on hon. members what I said in the beginning of my Statement, that our public expenditure will still require the most watchful caro. My object has been, whilst drawing attention to many satisfactory evidences of increasing production and improved values, to lead to the conclusion that it is by Buch means, aided by public and ptivato economy, rather than by large public expenditure, that the permanent prosperity of the colony will bo secured. That, sir, ia all I have to say. I have, I believe, laid before the Committee all information needed to enable hon. members clearly ti understand the financial position of the

1 colony, and to judge of ils substantial and most satisfactory progress, especially in the occupation of the laud, and the steady—l might ' say rapid—developments of its industrial enterprises. In 1887, in disclosing to the Com- • mittee the difficulties which then lay before it \ e.nd tho Government, I ventured to say that, with i the necessary efforts and sacrifices, those difficulties were well within our power to overcome. Parliament and the people took entirely ' the same view, and the facts and figures which I I have just laid before you show, I trust beyond '■ i]u st'von, that they were right—right, I Bay, I not only in tho belief that wo could overcome J our financial difficulties, but in the deeper j underlying belief on which the other rested, the assured belief in the vitality and resources of the colony.

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FINANCIAL STATEMENT., Issue 7943, 26 June 1889

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FINANCIAL STATEMENT. Issue 7943, 26 June 1889

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